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Review: The Gods That Failed, Larry Elliott and Dan Atkinson
By Andy | June 6, 2008
Life has been a little quiet around here recently mainly because all of the debate around the leadership of the Party has been driving me mad.
But, yesterday I read the new book by Larry Elliott and Dan Atkinson which I would recommend all of you to get hold of, not least because explores many of the issues around financial liberalisation that I’ve written about here but (rather obviously) in a more informed and detailed way.
‘The Gods that Failed: How Blind Faith in Markets Has Cost Us Our Future’ may well become something of a seminal book for those on the left. The book explores the recent history of the worst excesses of the liberalised financial markets. The authors believe that the second half of 2007 and the first half of 2008 was the time to take on what they call ‘the New Olympians’ of the financial markets. By early 2008:
“Their business models were broken, their reputations in tatters, their dependency on the state exposed their part in the crisis painfully clearly”.
For Elliott and Atkinson the failure of the West’s politicians to take on the New Olympians spells disaster, and their book is devoted to explaining why.
In essence the authors argue that our political leaders have done everything they can to support the liberlisation of finance in order to stimulate wealth and growth in the City. But this growth has not been beneficial to the majority of us. While City bonuses have soared there has been no particular effect on the general rates of growth of the economy, on wage levels or on the security of the lives of ordinary people. Worse, market liberalisation is making our lives more insecure not only effecting the well being and opportunities of the working class but now of the middle class as well. In essence they argue that many of our professional institutions that have served us well - and which are the bedrock of many local communities - stand to be transformed in the coming years as local assets are stripped, services depersonalised and profits sucked from local communities to bolster even more the coffers of international corporations.
Our politicians have often seemed to argue that this is the only way for us to develop, we have no choice but to follow these new market orthodoxies. Our political leaders have become one trick ponies.
But there are other paths to take and some have taken them very effectively. The Authors look quite closely at Asian economies following the economic difficulties of the mid nineties. Analysis in Asia showed that those economies that were insulated from the global markets - India, China - and those with currency controls such as Indonesia - rode the crisis fart more effectively. The IMF effectively sabotaged attempts to create an Asian Monetary system. Asia’s politicians then decided to change, to ensure that their economic growth was not simply to be allowed to be spread without planning and proper strategy. During the last ten years growth has been used to ensure that Asia’s economies have turned from borrowers to savers and subsequently lenders and investors. By contrast the USA and the UK have become engulfed in a mountain of debt fueled by consumer spending - policies that delighted the markets in the short term.
This book looks at the sixty year or so history of the New Olympians and their constant quest to extract profit without virtually any other strategic concerns. It looks in depth at the emergence of the recent crisis - the detail of the collapse of Northern Rock and government’s subsequent actions re fascinating. And more chillingly the authors consider our future. They show how the heads of our financial institutions had precious little real idea of what was happening in their own companies - they were simply too happy with dramatic short term profits to really understand the implications of their behaviour.
The Challenge to the left, and to our leaders, would seem to be to acknowledge that the financial orthodoxy of recent years needs to be challenged; we need a new course. Elliot and Atkinson sum up the failures of the New Olympians rather starkly in their introduction with the following ‘charge sheet’:
They promised economic stability, and have delivered chaos and volatility.
The promised an economic order based on enterprise, thrift and personal effort and have delivered one based on chronic indebtedness and wild speculation.
They promised a ‘transparent’ future in which all costs and prices would be clearly laid out, allowing people to make informed choices in their lives. They have delivered a world of bizarre, occult financial knowledge, one in which everything from the true cost of of a mobile-phone package to the real value of billions of pounds’ worth of ’securistised’ debt is impossible to gauge.
They promised a greatly expanded middle class of property and share owning individuals, a New Yeomanry of sturdy, independent citizens. They have delivered the unleashing of havoc on professional and white collar career structures, smashed up the pension schemes of the middle class and forced their children deep into debt for the privilege of attending university.
This is an angry book but it is no purposeless rant. It is not, either a book that harks back to some imaginary glory days of old Labour. The positive modernisation off the economy, workforce and government is given proper reference here. It is also not a perfect book - some of their attacks on political correctness does make you cringe at time. But this is one of those books that provides the context, background and evidence to support those things that many of us instinctively feel at the moment.
‘The Gods that Failed’ should be read be all thinkers on the left for here are some real pointers of how policy should change and some real warnings of what could well happen if we don’t.
The Tories, of course, have no solution to these problems. They would simply offer us more of the same. The future battle ground between progressives and the Tory right might well have been sketched out here.
Go get hold of a copy. It will be the best £12.99 you spend this year!
The Gods that Failed: how blind faith in markets has cost us our future.
Larry Elliott and Dan Atkinson
The Bodley Head, £12.99
Technorati Tags: Dan Atkinson, Larry Elliott
June 7th, 2008 at 8:32 am
It has always amazewd me that Blair and Brown have continued with their fetish for privatisation, even given the fact that, for example, the most ardent supporters of rail privatisation now admit, albeit in a pusillanimous way, that it doesn’t work: “it was done the wrong way” they whine. Well, no rail system in Europe makes a profit. it is supposed to be a PUBLIC SERVICE, not a money making scheme, but that is what it is, thanks to the enormous subsidies we pay to the TOCs. We are now paying about double in subsidies what we paid to British Rail.
But they won’t learn, Andy: even given that, and the farce that is the PPP of london Underground, and the sheer lunacy of PFIs only this week we have had one of the fancy nancies, Ben Bradshaw, threatening to privatise “failing” hospitals. No doubt hew and his friend have enough money to use BUPA if needs be.
By the way, this should stop the right wingers in their tracks: they have always said the BBC is full of Communists and fellow travellers - well, both Bradshaw and Prettyboy Purnell and his amateur welfare reforms, worked for the BBC before they leapt aboard the NL gravy train.
July 18th, 2008 at 8:23 am
“One who trades their freedom for safety deserves neither” - Benjamin Franklin
One my favorite quotes. By liberalizing the market, and setting it into chaos it is getting rid of rigid social settings. Anyone anywhere has the ability to go anywhere, provided he can navigate the chaos. Regardless of his past. I think this alone is what made America great. And the UK followed as it should. Granted the current situation isn’t great. But i feel much more comfortable with allowing the forces of money to solve problems (ie. if there is a problem, people will pay for it to be removed, so other will profit from this) than some politicians that are elected by majority, which we all know isn’t always the right choice (Bush, cough)
Granted privatisation sometimes makes stuff appear worse initially (hey why am i paying more for my train) But this means that they are trying to cover costs, which means that now other companies should in theory be able to compete with them as neither are recieving gov subsidies. This in turn means more companies will be trying to reduce there running costs, so development of technology (eg more efficient trains) and as a result you pay less taxes (in theory) and get better train service.
Now i know that i say should an theory a lot, but what else are you going to go on? “China did it”? China also ran over a student with a tank, you going to do that too?
Anyway enjoy
Just getting my thoughts straight.